E-Malt.com News article: USA, OR: Craft Brew Alliance reports results for 2013

Craft Brew Alliance, Inc. (“CBA”), an independent craft brewing company, announced on March 6 final 2013 financial results for the fourth quarter and full year ended December 31st. The Company also confirmed previously reported guidance for 2014 based on continued sales momentum and focus on growing its bottom line.

Highlights for the fourth quarter 2013 include

A strong close to 2013 highlighted by 10% growth in depletions over the fourth quarter of 2012, the third consecutive quarter of double-digit depletion growth, reflecting continued momentum across the Kona Brewing, Redhook Ale Brewery, Omission and Square Mile Cider Company brand families and stabilization of the Widmer Brothers brand.

An increase in net sales and branded beer shipments of 5% and 6%, respectively, in the fourth quarter attributable to strong sales execution, as well as support from the company’s national partners, wholesalers and retailers.

A decrease in gross margin rate by 100 basis points to 26.0% in the fourth quarter compared to the fourth quarter last year primarily resulting from shifts in product and geographic mix and increased distribution-related costs.

Diluted earnings per share (“EPS”) of $0.04 for the quarter, an increase over fourth quarter 2012 EPS of $0.02, primarily due to improved gross profit and a decrease in selling, general and administrative (“SG&A”) expense.

Highlights for the full year 2013 include

Net sales growth of 6%, reflecting the continued strength of the Kona Brewing, Redhook Brewery and Omission brands, as well as continued repositioning of the Widmer Brothers brand.

Record depletion growth of 11% and owned brands shipment growth of nearly 8%, reflecting the continuing strength of the company’s complementary portfolio of craft beers.

Contract brewing revenue reduction of 40% as a result of the termination of certain contract brewing contracts in late 2012.

Gross margin rate of 28.1%, a reduction of 150 basis points from 2012, primarily due to product mix and distribution costs in the beer business and lower restaurant business margin related to the Woodinville pub remodel.

SG&A expense of $46.5 million, an increase of $1.6 million from 2012, reflecting continued investments in brand development and sales capabilities, partially offset by the leverage of one-time spending in prior years.

EPS of $0.10 versus 2012 EPS of $0.13.

Capital expenditures of approximately $9.9 million, reflecting continued investments in capacity, pubs, efficiency and quality initiatives.

The company achieved third consecutive quarter of double-digit depletion growth and increased momentum across all of its brands.

Anticipated financial highlights for 2014 include:

Depletion growth estimate of 7% to 11%.
Average price increase of 1%-2%.
Growth in contract brewing revenue of 25% to 50% as a result of new partnerships.
Gross margin rate of 28.5% to 30.5%. Gross margin rate is expected to expand 500-700 basis points over the next five years.
SG&A expense ranging from $52 million to $54 million primarily reflecting reinvestment into sales and marketing infrastructure.
Capital expenditures of approximately $15 million to $20 million, continuing investments in capacity and efficiency improvements, quality initiatives and restaurant and retail.

About Craft Brew Alliance

CBA is an independent, publicly traded craft brewing company that was formed through the merger of leading Pacific Northwest craft brewers – Widmer Brothers Brewing and Redhook Ale Brewery – in 2008. With an eye toward preserving and growing one-of-a-kind craft beers and brands, CBA welcomed Kona Brewing Company in 2010, and then launched Omission beer in 2012 and Square Mile Cider Company in 2013.


07 March, 2014